Wabash Company has the following information pertaining to its Stone Division fo

Question

Wabash Company has the following information pertaining to its Stone Division for this year

Stones

Fixed manufacturing expenses

$100,000

Fixed selling and administrative expenses

70,000

Sales

400,000

Direct manufacturing costs (variable)

100,000

Variable selling and administrative expenses

90,000

Common expenses for the year are $24,000.

Calculate the Stone Division’s contribution margin.

Stones

Fixed manufacturing expenses

$100,000

Fixed selling and administrative expenses

70,000

Sales

400,000

Direct manufacturing costs (variable)

100,000

Variable selling and administrative expenses

90,000

Explanation / Answer

Sales-Direct manufacturing costs (variable)-Variable selling and administrative expenses=400,000-100,000-90,000=$210,000.

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